# Brief for the Civil Aeronautics Board — CAB v. Delta Air Lines, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386410_0017%3A04 ## Record - **Collection:** Supreme Court brief - **Document type:** Brief for the Civil Aeronautics Board - **Published:** January 1, 1961 - **Citation:** 367 U.S. 316 ## Text Oifice-Supreme Court, U.S. pe Pia, BG:: 1 MAR 20 196] JAME3 &. BROWNING, Ciork | Sue Supreme ot of he ited ses — OCTOBER TERM, 1960 Alar Cv “Amoxavmics Bodup, PErrnioner | v. . 8 on ars LINES, Inc. ‘ON WRIT OF CBRTIORARI TO THE “UNITED STATES COURT OF APPEALS FOR THE SECOND OIRGUIT | BRIEY YOR THE CIVIL ARRONAUTIOS BOARD Sis On + Department of Justice, Washington 25, D.O. . JOHN H, WANNER, ; . General Counacl, 0. D. OZMENT, | P Associate Genera} Cownseh, ° . MORRIS CHERTEOV, | a Attorney, ; pe Gill Leronoites Boord, Webhington B,D 0. g ey INDEX I nace cdepackban ae Jurisdiction. ___ 2. ---- (ade pi td odek eee EE PO cnn ccndgunesckanvepeschenes Statute and regulations involyed_..__-__._2_._-- (EN SE IE OAL Ce AGS Summary of argument Paden a nsth amet ake Gikeaaee Argument: , The Board’s authority to ‘act on timely’ peti- tions for reconsideration of an order granting a certificate is not terminated because it permits the certificate to beeome effeetive 587785—61—_1 © onto = im m8 11 while the petitions are pending - - - - ------ Eos caecencdet saudesoausennney wes CITATIONS - Cases: : : Albertson v. Federal Communicationh Commis- ates, 100 F. D0 BB ain oi wien doccicenenes American Trucking Agsns. v. Frisco Co., 358 U.S. 133_---- OE ARE GN, Lae Ashbacker Radio Corp. v. Federal Communica- —— tions Commission, 326 U.S. 327-.--_-.------ Black River Valley Broadcasts v. McNinch, 101 DB aie ctieee ete eeeeeeas Braniff Airways v. Civil pee eniees Board, 147 F. 2d 162....----. PERE ee” Fee Butterfield, W. S., Theatres v. Federal ain: nications Coumntiaten, 237 -F. 2d 552__.___- -. Callanan Road Co. v. United im, 345 US. ME dcictcdnedcnenteueeee cae Cincinnati-New York Additional Serrice, § GAD, Gi aicse iwccknckhakeass ace Cases—Continued &. | ‘Consolidated Flowers Shipments v. Civil Aero- nautics Board, 205 F. 2d 449._......----- Denver-Chicago Trucking Co. Common Carrier Application, 27 M.C.C. 343... --------- Eastern Air Lines v. Civil snenge ‘Board, Eastern Air Lines v. Civil ‘diame Board, , 271 F. 2d 752, certiorari denied, 362 U. s. Enterprise Company v. ‘Federal Commumniiations Commission, 231 F. 2d 708, certiorari denied, sub nom. Beaumont. Broadcasting Corp.. v. Enterprise Company et al., 351 U.S. 920..-- Federal Communications Commission v. Na- tional Broadcasting C'o., 319 U.S. 239__-__-- Frontier Airlines, Inc. v. Cuwil en : Board, 259 F. 2d 808_..._.__.---+_---- Fuller-Poponce Truck Co. v. Public pares Commission, 96 P. 2d 722...---.-------- Hazard-Hyden Bus Co. v. Black, 293 Ky. 379, MR AM... 05-22-52 -6----- ‘ Levers v. Anderson, 326 U. S, RGSS North Central-Case, 8 C.A.B. 208 (1947): .._- , Outland v. Civil Aeronautics Beare, 284 F. 2d | Service to Phoeniz - Case, _Order E_12089 ESE Ses Re ee ema.” eee ae ' Smith Bros., Revocation of Certificate, 33 M.C. C. South Central Area Local Service Casé, Order E-14219 itigeare amir immed AO eae | Wl . .Cases—Continued United States v. Rock Island Motor Transit Co., ee te a Page. ' 25 United States v. Seatrain Lines, 329U.S. 424. 9, 18, 21 United States v: Watson Bros. Transportation, Co., 350. U.S. 927, affirming 132 F. Supp. United-Western, Acquisition of Air Canvier Property, 11 C.A.B. 701 -(1950)__._~__.._- Waterman Steamship Corp. v. Civil Aeronau- tics Board, 159 F. 2d 828, ee, 333 U. S. ° Western Airlines, ies v. Civil Aeronautics Board, 194 > | Nps at pe Statutes: 4 Civil Aeronautics Act of 1938, 52 Stat. 973: eetie SNOD. 65 oc cs once nce w ccna see Section 401(h)_—.-_- Oe ger eny oor: 2 Federal Aviation Act, 72 Stat. 731, 49 U.S.C. 1301, et seq.: Section 204(a), 49 U.S.C. 1324(a)______- ; Section 401(d), 49 U.S.C. °1371(d) ___-- 21 18 19 18 17 17 13 24 Section 401(f), 49 U.S.C. 1371(f)_2, 9, 12, 14,15 Section 401(g), 49 U.S.C. 1371(g)______- a, « - 9, 12, 15, 16, 19, 24, 26 Section 1001, 49 US.C. ae Section 1005(4), 49 U.S.C. 1485(d)_____- ' Section 1006(e), 49 U.S.C. 1486(e)_____- Motor Garrier Act of 1935, 49 Stat. 543: Section 204(e)_2__-___-_-_--_-------___-- Section 212(a)_...---- ieaeeue caanws me | 47 U.S.C. 312_.---2-- ee ce o's 47 U S.C. 316. ...-.-.-.-- gene eekanuee ~ Miscellaneous: © — ic3 : Civil Aeronautics Board Orders: (E-13835)—May 7, 1959....... _ (E-13211)—November 28, 1958______ _- I v . al Miscellaneous—-Continued _ Civil. Aeronautics Board Rules of Practice: Page 14 C.F.R. 302.37 (1956 Rev. ed.)%._.-. 3, 6, 13 14 C.F.R. 302.37 (1960 Supp.) ----- - —- 13. Confidential Committee Print, May 1, 1937, on S. 2, 75th Cong., Ist Seas. .....---:.----- 17 ee ne o€ o J 2 6 Gn the Supreme Gourt of the United Piates OcTosErR TERM, 1960 No. 492 Civit AERONAUTICS Boarp, PETITIONER v. : Detta Arr: Lines, Inc. * ON WRIT OF CERTIORARI TO THE UNITED! STATES COURT OF APPEALS FOR THE SECOND. CIRCUIT BRIEF FOR THE CIVIL AERONAUTICS BOARD OPINION BELOW The opinion of the court of appeals (R. 98-107) is reported at 280 F.2d 43. @ . JURISDICTION . The judgment of the court of appeals was entered on July 21, 1960 (R. 107). The petition for a writ of _ certiorari, filed on October 19, 1960, was granted on December 12, 1960 (364 U.S. 917; R.. 108)... The _ Jurisdiction of this Court is invoked under 49 U.S.C. 1486(f) and 28 U.S.C. 1254(1). QUESTION PRESENTED Whether the Civil Aeronautics Board, once it’ has entered an order permitting a certificate of public (1) ° rH ‘ " ‘ 2 ™~ “ —_ = ol 2 ee oo” 2 | a © convenience and necessity to beeome effectiv e, is with- out power thereafter, in the same proceeding, to modify the certificate in response to a timely petition for reconsideration filed prior to the effective date — of the certificate. : prarers ‘AND REGULATIONS INVOLVED Sections 401 ( f) and (g) of the “Federal Aviation , Aet (72 Stat. 755-756, 49 U.S.C. 1371 (f£) and - ‘(g)) - provide: EFFECTIVE DATE AND DURATION OF CERTIFIC4 TE (f) Each: certificate shall be effective from the-date specified therein, and shal] continue in effect until sttspended .or revoked “as herein- after provided, or until the Board, shall certify that operiition thereunder has ceased, or, if issued for a limited period of time under sub- section (d)(2) of. this section, shall continué in effect until the expiration thereof, unless, * prior to the date of expiration, such certificate ; . shall be “suspended or revoked as provided | herein, or the Board shall certify that opera- tions thereunder have ceased; Provided, That if any service authorized by a certificate is not inaugurated within such period, not less than ninety days,-after the date of the authorization “as shall be fixed by the Board, or if, for a - period of ninety days or such “other period as may be designated by the Board any such serv- ice is not operated, the Board may by order, entered after notice and hearing, direct that ‘ such certificate shall thereupon cease. to be effective to the extent: of such service. | sisi : : ate “ AUTHORITY TO MODIFY, SUSPEND, OR REVOKE (g). The Board upon petition or complaint or upon its own initiative, after notice: and hearings, may alter, amend, modify, or suspend any such certificate, in‘whole or in part, if the _ public convenience and necessity so require, or may revoke any such certificate, in whole or in part, for intentional ‘failure to comply with any provision of this title or any order, rule, or . regulation issued hereunder or any term, con- dition, or limitation of such certificate: Pro- ‘vided, That no such certificate shall be revoked unless the holder thereof fails to comply, within a reasonable time.to be fixed by the Board, with an order of the Board commanding obedi- ence to the provision, or to the order (other than. an order issued ‘in accordance with this proviso), rule, regulation, term, condition, or — limitation foind by the Board to have ‘been - Violated. Any interested person may file with the Board a protest or memorandum in sup- _. port of or in opposition to the alteration, Sect . amendment, modification, suspension, or revo- cation of the certificate. . ion 302.37 of the Rules of Practice of the Civil " Aeronautics Board, 14 C.F.R. 302.37 (1956 Rev. ed.), provides: ? § 302.37 Petition fore reconsidergtion—(a) Time for filing. .A petition for reconsidera- ie tion, rehearing or reargument may be filed by. any party to a proceeding within thirty (30) days after the date of service of a final order by the Board in such proceeding unless the 1 The rule was amended on February .14, 1959, in respects § not here relevant. See note 7, p. 13, infra. i 4 time is shortened or enlarged by the Board, except that such petition may not be filed with. | respect to an initial decision which has become final through failure to file exceptions thereto. However, neither the filing nor the granting ‘of such a petition shall operate as a stay of -. guch final order unless specifically so ordered by the. Board. . After the expiration of the period for filing a petition, a motion for leave - to file such petition may be filed; but no such motion shall be granted except gn a showing of unusual and exceptional circumstances, con- _ .stituting good cause for failure to make timely ~ filing. Within tew (10) days after a petition ‘for reconsideration, rehearing, or reargument is filed, any party to the proceeding may file’ an answer in support | of or in opposition to . the petition. _ (b) Contents of petition—aA petition fof re- consideration, rehearing, or reargument shall state, briefly and specifically, the matters of record alleged to ‘have been erroneously de- cided, and the ground relied upon, and the relief sought. If the -petition is based, in whole or in part, on allegations as to the™ consequenices which would result from the Board’ s order, the basis of such allegations shall be set forth. If the petition is based, in whole or in part, on new matter, ‘such new ‘matter shall be set forth, accompanied by a statement to the effect that petitioner, with due diligence, could not have known or dis- covered such new matter prior to the date the case was submitted for décision. (c) Successive petitions—A successive peti- tion for rehearing, reargument, or reconsidera- ) tion filed by the same party or parties, and upon substantially the same ground as a for- mer petition which has been considered or denied by the Board, will. not be entertained. STATEMENT - The present controversy arises out of the so-called Great Lakes-Southeast Service case, a procéeding in which the Civil Aeronautics Board considered the teng-haul service needs of an area extending roughly between the Great Lakes and Florida and the appli- cations of numerous trunkline carriers seeking to serve these needs. In order to keep the administra- tive proceedings within manageable bounds, the Board declined to consolidate a number of applications which had been filed by various carriers to pro- vide new and: improved short-haul service between __ certain intermediate cities in the area, (R. 5). In- stead, it directed ‘the institution of a separate pro- / ceeding (Great Lakes Local Service Investigation, _ Docket No. 4251) on those applications. In order to insure that the separation of the two proceedings -_ would not deprive the existing local-service carriers of their rights under Ashbacker Radio Corp. v. Federal Communications Commission, 326 U.S. 327, and to give those carriers an opportunity to show the effect of a grant upon their existing operations, the Board permitted the local carriers to’ intervené in the long- haul proceeding (R..5-6). — | The Board’s-decision in the long-haul proceeding (R. 11-53) made a number of awards, including. one permitting the respondent, Delta Air Lines Be eciaaee ee : 2 6 (1) to extend an existing route northwest so as to provide service from Detroit to Miami and (2) to add Indianapolis and ‘Louisville as intermediate points on its existing Chicago-to-Miami route. Al- though the Board. imposed certain restrictions on a - number of the new awards (including the authoriza- tion to Delta, R..51) so as to protect local service car- riers,’ it did not impose such restrictions with respect — ‘to a number of intermediate points on the long-haul routes Delta was authorized to serve. , The Board’s decision and order in the. long-haul Great Lakes-Sontheast Service case was issued on . September 30, 1958 (R. 11), and provided that the certificates issued pursuant thereto were to become effective on November 29, 1958, unless postponed by the Board prior to that date (R. 56). Within the thirty days then prescribed by the Board rules (see _ § 302.37 of the Board Rules of Practice, 14 C:F.R. - 302.37, 1956 Rev. ed., supra, pp. 3-5), Lake Central Air- lines and Piedmont Aviation, local carriers which — had ‘been permitted to intervene in the long-haul pro- ceeding. to protect their interests (R. 3, 5-6), filed - timely. petitions for reconsideration. ‘These petitions — sought to impose on Delta’s service to some ten pairs of cities* a requirement that service .to those points "S ttaas inieibtlins normally preclude so-called “turnaround” service between two points by requiring that service between these points be only on a flight originated or. terminated in some distant city. (See, e. 9+ R. 51). * The ten pairs of cities in issue were: Indianapolis-Chicago; Indianapolis-Louisville; Indianapolis-Cincinnati; Indianapolis- Lexington; Indianapolis-Asheville; Dayton-Lexington; Dayton- Asheville; Cincinnati-Louisville;. Louisville-Lexington; and Louisville-Asheville. 4 ee ee ‘ti = é originate or terminate at some distant city (R . 88-93). - Lake Central also asked that the effective date of Delta’s certificate be stayed pending a Board decision on the petitid&s .for reconsideration (td..at 92-93). On November 28, 1958, one day-prior to the pro- , posed effective date of the certificates, the Board is- sued a lengthy memorandum and order (E-13211, R. . 57-80) in response to numerous requests for stay which had been filed in connection with sixteen peti- tions for reconsideration addressed to its September 30 decision (R. 57-58, note 1). With one exception,‘ these stays were denied, the Board concluding that ‘the parties have not made a sufficient showing of , probable legal error or abuse of ‘discretion in our decision’’ and that in view of the advent of the peak | winter season the ‘‘new services to Florida are imme- diately required’’, a consideration which the Board felt ‘clearly weights the scale * * * in favor of a _ denial of the requested stay’? (R. 58-59). But the ‘Board made clear that “because. of the detailed mat- . -ters raised in the petitions for reconsideration, it will not be possible to finally dispose of them until after November 29” (R.'58). It stated further that denial of the stays ‘“‘is in no way prejudicial to the legal rights of those parties seeking reconsideration. Noth- ing in the present order forecloses the Board from full and complete consideration. of the pending peti- ” 4 The exception was with respect to a certificate abarded to Eastern Air Lines. This certificate was’ stayed because of the serious questions raised by the petition for reconsideration and, also, “bécause of a strike * * * Easterti in any event is pres- . —_ unable to inaugurate service-*-*-*"-{R.-78).° “ 8 tions for reconsideration on their merits’? (R. 80). On May-7, 1959, the Board issued an order (E- _ 13835) -disposing of the petitions on their merits (R. 81-87). This order, which gives rise to the pres- _ent controversy, granted the petitions of: Lake Central and Piedmont and imposed * restrictions on Delta’s — certific ‘ate which preclude operations between the. ten * designated pairs of cities unless the flights originate cor. terminate at Atlanta or a point south thereof (id. at. 83-84, 87). In imposing these restrictions, the 3oard noted that ‘‘[i]f, after deciding the issues pre- sented in Great Lakes Local Service Case, we conclude that the long-haul restrictions are not required, we | will have full freedom to remove them at that time”’ - (id. at 83). The court. of appeals reversed, holding that the . Board, once it permits a certificate to become effec- tive, is thereafter without power, in the same proceed- ing, to add restrictions to the certificate, even “in response to a timely petition for reconsideration filed prior to the effective date of the: certificate (R. 98- _ 107). The-eourt assumed that Delta was ‘‘on notice” _ that the Board might ‘modify the eertificate on. the basis of matters: set forth in the filed petitions for reconsideration” (id. at 106), stating that its “hold- ing is not based upon the fact that, prior to the date 5 The awards actually became effective on December 5, 1958, because of a temporary stay granted by the Board (R. 94-95) to enable the court of appeals to consider a stay request addressed to it by Eastern Air Lines i in its unsuccessful efforts to challenge the basic awards in the proceeding. See Fast- ‘enn Air Lines v. Civil Aeronautics Board, 271 F. 2d 752 ( CAL 2), certiorari denied, 362 U-.S.. 970. 9° the certificate was moditied, Delta inaugurated service authorized by the certificate”’ (ibid.).° Its view was that Sections 401 (f) and (g) of the Federal Aviation _ Act require the conclusion that, in the: absence of fraud, misrepresentation or clerical error, a certificate which the Board has .permitted to. become effective ean thereafter be modified nly in a new proceeding ° ‘Satisfying the requitements of Seetion 401(g) (thid.). SUMMARY OF ARGUMENT . The: changes in a certificate of public convenience and necessity to which the procedures prescribed in Section 401(g) apply are those occasioned by con- . ditions arising after completion of the proceeding in which the certific ‘ate Was issued. The section has- no “application until the dec ‘ision-making process ‘in the original certification proceeding has come to an end. And the event which **marks the end of: that proceed- ing *-* *” is when the certificate is ‘finally granted and the time fixed for rehearing it has passed * * *,” United States v. Seatrain Lines, 329 U.S. 424, 432. Section 401(f), like Section 401(g¢), implic itly assumes that the proceeding in which the -certificate has been issued has come to an end, and therefore its provision that a certificate ‘‘shall continue -in effect until sus- pended or revoked as hereinafter provided” does not preclude the Board from acting upon a timely petition for reconsideration where it permits the certificate _ to become effective pending rehearing. | “On January 1, 1959, Delta had inaugurated a local flight including service between Chicago and Indianapolis, one of the ten pairs of tities to which the Lake C entral and Piedmont _ Petitions for reconsideration had been directed (R. 101). te 10 Both in the civil aeronautics field and in namerous related areas, the courts “have coricluded that the decision-making process remains alive while a timely petition for reconsideration is pending-and that there-_ fore the administrative agency retains authority to change its initial order during that period. Accord- ingly, the Board’s power was not cut off by permit- ting respondent’s certificate to become effective while timely petitions for reconsideration were pending in order to allow needed services to be provided immedi- ately. a An’ operation: which is permitted to go forward while petitions for reconsideration of the’ grant°are pending may be deemed temporary or conditienal; i.e., subject to defeasance to the extent that elements of the grant are involved in the rehearing pro- cedures. It is ‘immaterial that Delta did not apply fer temporary authority as such, since it proceeded with full knowledge that the certification was not in all respects final. We stress that Delta resisted a stay of the effective date of the certificate so that it might earn revenues during the pendency of the applications for reconsideration and that the Board gave explicit notice that the denial of. stay would not foreclose ‘full and complete consideration of the pending petitions.’’ Respondent “cannot blow hot and cold and take -now a position contrary to that taken in the proceedings it invoked to’ obtain ‘ the [Board’s]- approval,”’ Callanan Road Co. v. United States, 345 U.S. 507, 513. © | As a result of the decision below, as the court of appeals acknowledges, ‘‘the Board’s dilemma is real.” - © ie . * = gd . od 1 © (R. 106,) The Board either must make unduly hasty i ' _-decisions on requests for reconsideration raising com- plex problems or it must postpone the effective dates of certificates—a course which deprives the public of needed services and tle carrier of revenues. The -¢aseg upon which the court below relied are clearly inapposite since all of them related to the question whether an agency may reopen a closed proceeding: and modify. an outstanding certificate long after dis- position of any petition for reconsideration «hich may have been filed.. Those cases, in short, were within the class to which the provisions of Section 401(g) clearly apply. They cast no doubt upon the distinetion between a case in which a modification is sought after the administrative process has been com- . _ pleted and one in which the grant is still the Subject of consideration in the initial proceeding as the re- sult of a timely: and proper invocation of ordinary rehearing procedures. | “ ARGUMENT THE BOARD’S AUTHORITY TO ACT ON TIMELY PETITIONS _ FOR RECONSIDERATION OF AN ORDER GRANTING A- CER- TIFICATE IS NOT TERMINATED BECAUSE IT PERMITS THE CERTIFICATE TO BECOME EFFECTIVE WHILE THE PETI- TIONS. ARE PENDING The court below held that, once the Delta certificate - had been allowed to become effective, the Board lost power to act upon pending petitioris for reconsidera- tion of the basie Board -order granting the certificate. This conclusion was not based ‘on any ¢ ‘termination that the result was compelled either as a matter of 12 due process.or fairness to Delta. Indeed, the court assumed that Delta was adequately put on notice, as of the time. the Board made the certificate effective, that this action’ was ‘without prejudice to any action which might subsequently be taken on the pending petitions... Nor did the ‘court believe that its holding was essential, or even advantageous, to the. proper performance of the Board’s functions; on the con- _ trary, it frankly acknowledged that the ‘‘dilemma’”’ ‘in which its decision placed the Board was’ “real”? (R. 106). The court’ s rationale is that the result ‘is dictated by Section 401(f) of the Federal Aviation Act, 49 U.S.C. 1371(f), which’ states that ‘“[e]ach certificate shall be effective from the date specified therein, and shall continue in effect until suspended or revoked as hereinafter provided * * *.”" This language it construed to mean that no effective cer- tificate could be changed in any manner, except after further notice and hearing in accordance with the provisions of Section 401(g) of the Act, 49 U.S.C. 1371(g). _ We shall urge that this vebeleates inter psibusion its not required by the statute or by the relevant de- cisions. In our view, a Board order remains subject to modification or rescission in response to a timely petition: for reconsideration, without regard _ to whether the Board has authorized the commencement of aperations. This is so, we believe, because the pro- visions of the Act requiring the institution of formal new proceedings to amend or modify certificates may - reasonably be read as applicable to closed proceedings 13 5 : : rather than to the situation presented here, where rehearing procedures had not been completed. | A. We note, at the outset, that no question has been raised as to the: Board’s authority to adopt Section 302.37 of its Rules of Practice (14 C.F.R. 302.37 (1956 Rev: ed.) )' governing réconsideration. Al- though the Federal Aviation Act, unlike various other federal statutes establishing regulatory commissions, does not expressly. ‘provide for reconsideration of Board orders, ‘*[t]he power to retonsider is inherent in the power to decide.” Albertson y. Federal Com- " munications Commission, 182 F. 2d 397, 399 (C.A.D.C.). The Board’s pow€ér also derives from . Sections 204(a), 1001, and 1005(d) of the’ Federal Aviation Act, 49°U.S.C. 1324(a), 1481 and’ 1485(d).° See American Trucking Assns. v. Frisco Co., 358 U.S. 133, 145.° 7 By a recent revision of the rules, the time within which a petition for reconsideration in a certification (“economic”) pro- ceéding may be filed, without special order of the Board, has been reduced from thirty to’ twenty days. See 14 C.F.R. 302.37 (1960 Supp.).» - § Section 204(a) empowers the Board to “perform such acts, * * * and to make and amend such general or special rules, Tegulations, and procedure, pursuant to and consistent with the provisions of this Act, as it shall deem necessary to carry out the provisions” thereof. Section 1001 authorizes the Board “subject to the provisions .of this Act'and the Administrative Procedure Act”, to conduct. its proceedings “in such manner as will be conducive to the proper dispatch of business and’ to the ends of justice.” Section 1005(d) provides ~that - “[e]xcept as otherwise provided in this Act, * * * the Board is empowered t6 suspend or modify [its} orders upon such notice.and ip such manner as [it] shall deem proper.” *The provisions of Section 1006(e) of the. Act, 49. U.S.C. 1486(e), precluding judicial review of any objection to a 14 Nor is it contended that the Board rule governing: reconsideration, providing for the filing of a petition . - within thirty days of the issuance of the order (a pe- riod well within the sixty. days upon which certifi- cates are ordinarily made effective), was in any respect improper. The question is solely whether Section 401(f) of the Act precludes the*Board from acting on such a petition if it has not done so before the effective date specified in the certificate. a certificate, onee effective, is to ‘ ‘continge I —untif® suspended or revoked as_ hereinafter vided * * *.”” The defect of this view is that it ignores the fact that Section 401(f), in setting out the circumstances under which an effective certificate. may be altered” or terminated, obviously contem- Board order not first “urged before the Board” would appear to requiré a petition for reconsideration as a prerequisite to obtaining court review of matters not fairly in issue during the agency proceeding. Compare Levers v. Anderson, 326 U.S. 219, with Peoria Braumeister Co. v. Yellowley, 123 F. 2d 637 (C.A. 7). _ It should be noted that Section 401(f) does not, in terms, purport to govern the specific situation presented by this case of a minor amendment to a much more comprehensive certifi- cate.. It provides only that. a certificate “shall continue in effect” until suspended or revoked “as hereinafter provided” (or until the Board certifies that operations have ceased). Nothing is said about the terms of operation under the certifi- cate, “and specifically there is no reference to the Board’s authority to alter, amend or modify the certificate once it becomes effeetive. Thus, even if the court of appeals’ inter- pretation of. the section was otherwise correct, it need not be read as if it provided that a certificate shall “continue in effect without change until altered, amended, modified, sus- pended or revoked as hertinatter provided.” 3 — 15 plates the situation which prevails after the under- , lying Board proceeding has been finally .coneluded. ‘ The question -when the Board’s decision becomes final is not answered simply by referring to the date’ that the carrier is permitted to commence operations. Thus, it is clear that a certificate, effective in the ~ - sense that carrier operation thereunder would be — legal, would nonetheléss be terminated, without going through the procedures specified in Section 401(g) of the Act, if the Board oftler making the award _were set aside upon judicial review. The situation is - essentially the same with respect to reconsideration pursuant to a valid Board rule. See Federal Com- munications Commission v. National: Broagicasting Co., 319 U.S. 239, 245. This is not to say that the Board has unlimited powers to keep a proceeding ‘alive through the exercise of its rule-making authority, or that Section 401(f) ‘of the Act is without function beyond specifying the date on which a certificate first becomes effective. Ob- viously, the Board has a duty to dispose of petitions ‘for reconsideration within a reasonable time. Also; Section 401(f) may well preclude entertaining . an out-of-time petition for reconsideration filed after a certificate has gone into effect. For present purposes, it suffices to say that when a certificate becomes effective at a time when: one or more valid petitions for reconsideration are already pending, it does no violence to the letter or spirit “ of Section 401(f) to “Tt would appear that Delta received, in substance, all of the protection afforded by Section 401(g), even assuming the court of appeals’ view of the law to be correct. For “notice” ~s 16 i recognize that the certificate is subject to defeasance in whole or part should the, petition for reconsidera- _ tion be granted. We submit that, at the least, this should bé the’ rule where, as here, the Board, permitting the certificate to hecome operative, bas expressly conditioned its approval upon the outcome of the pendins: petitions for reconsideration. The. question . whether Section 401(g) should be -read as applicabfe only to certificate changes which , take place after the initial licensing proceeding has ‘ . been fully completed must be. resolved, as indicated above, by a consideration: of the logic and sense of the statute. In this process, one must give weight to . the presumption that Congress was fully aware of the normal incidents of the administrative process, ‘including ‘the precept that the power to decide in- cludes the power to reconsider. ‘Legislative history, however, is of little aid in this case. There was no _ ” specific’ reference to the question now before the Court when Congress congigered the Federal “Aviation Act of 1958, the predecessor Civil Aeronautics Act of 1938, or the Motor Carrier Act of 1935, on which the Civil Aeronautics Act was patterned. However, this: of the proposed modification of the certificate was provided by the petitions for reconsideration, as well as by the Board’s express reservation, in ‘its. order denying a stay, of its “power to modify the certificate on the basis of the matters set forth in the. filed petitions for reconsideration” (R. 106), And any “hearings” relevant to the issue had already been had since reconsideration was souglit gn the basis of the record already made (R. 88-93). ~“Thus,.even if the Board aétion on recon- sideration were deemed a modification requiring proceedings in compliance with Section 401 (g); ‘there was compliance with the requirements of that section in everything but name. atta 17 “much may be said. Sections 401 (g) and (h) of the ~ Civil Aeronautics Act (which are identical to Sections 401 (f) and (g) of the Federal Aviation Act) were: modeled after Section 212(a) of the Motor Warrier | Act of 1935, 49 Stat: 555. Sectién 212(a) of the latter sfatute was certaiMly not designed to’. pre- clude the modification of an effective certificate in re- _ sponse to a timely petition for reconsideration. _In- deed, the original Motor Carrier Act, -having provided in Sectidn 212(a) that certificates shall be ‘effective from the date specified therein” and ‘‘remain in effect until terminated .as herein provided,’ contained an- other provision (Section 204(e), 49 Stat..547) which declared that the Commission may reconsider any . “decision, order, or requirement,” that an application for reconsideration shall not~constitute a stay ‘of the Commission’s action,-and that on rehearing the Corfh-~ , ‘ mission might reverse, change, or modify its ‘original ‘decision, order, or requirément.” Thus, there was na. ‘ question that .the Interstate Commerce Commission was empowered to modify an. effective: certificate award in response to a timely petition for reconsider- ation. See Denver-Chicago Trucking Co. Common — Carrier A pplication, 27 M.C.C. 343, 345. There is no © ? “Tt appears clearly that Segtion 401 (g) and (h) of the Civil Aeronautics Act. were taken directly from Section 212(a) of the Motor @arrier Act. of 1935. See Confidential Cagmnittes Print, May 1,-1937, on S. 2, 75th Cong., Ist. Sess., pp. 42-43, . Although the Civil Aeronautics Act did not have special statutory provisions dealing with applications for reconsidera- tion, it is scarcely to be doubted that the power.,to reconsider is inherent and does not a Specific authorization. See supra, P. 13. P to conform to the provisions of this chapter and-the rules, _ regulations, and requirements of the Board hereunder,’ and that such transportation is reqyired by the public ad 25° therefor.” But this is not an obstacle. Taking into acéount (a) that Delta opposed a stay of authorization - as sought by the applicants for reconsideration and (b) that it proceeded to operate with full notice that the Board, which had not yet completed the proceeding, proposed to do so, we submit that it must be takén to have acquiesced in the conditions which were im- plicitly attached to the Board’s approval. See Calla- nan Road Co. v. United States; 345 U.S. 507, holding ‘that a ‘transferee of a water carrier permit, having invoked the power of the Interstate Commerce Com- mission to approve the transfer of an amended per- mit to it, could not thereafter challenge the procedures by which. the Commission had. amended the permit while it was in the transferor’s hands. Cf. United States v. Rock Island Motor Transit Co., 340 U.S. 419, 435, holding that the Interstate Commerce Commissi6n, in approving the acquisition of two motor carriers by a railroad affiliate, could reserve the power to impose future limitations upon the certificates in order to insure that the activities of the new sub- ‘sidiaries would remain auxiliary and supplemental _ to rail operations, without offending a statutory pro- . convenience and ett otherwise such. —pmain shall be denied. (2) In the case of an application for a certificate to engage in temporary air transportation, the Board may issue a certificate authorizing the whole or any part thereof for such limited periods as may be required by the public convenience and necessity, if it finds thar the applicant is fit, willing, and able properly to perform such transportation and to conform to the provisions of this chapter and the rules, regulations, and requirements of the Board reeen . 26 vision stating that a certificate shall remain in effect _ until suspended or terminated. Since the court of appeals refused to consider the authorization in this case as one inherently limited, ~ albeit Delta was unmistakably aware of the Board’s_ declared purpose to reserve final decision on the. matters’ presented for its reconsideration, it .is. diffi- cult to see how the court’s invitation to consider other possibilities leaves the Board any appreciable room - for improvisation. The only satisfactory answer to - the practical probfem,.we believe, is that the Board, liké similar agencies -performing licensing funetions, should be deemed empowered to adopt and implement ordinary... rehearing procedures. If. Section 401(g) is viewed, as we think it should be, as a provision ad- dressed only to modifications, siispensions and rev- ocations subsequent to the completion of the initial licensing proévedirig, the Board will be able to pro- ceed in customary and orderly fashion. 27 CONCLUSION. ‘The judgment below should be reversed and the cause remanded with instructions to. dismiss the pe- tition for review. Respectfully submitted. _ | ARCHIBALD Cox, Solicitor General. - LEE LoeEvINGER, Assistant Attorney General. ‘Ricuarp A. Sovomon, Irwin A. SEIBEL,. -O Attorneys. JoHN H. Wanner, General Counsel. & O. D. OzMeEnt, ' Associate General Counsel, - Morris CHERTKov, : Attorney, | Civil Aeronautics Board.. _ Marcw 1961. - © 8 GCOVERMUERT PRinTi se OFFICE: 1968 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386410_0017%3A04. Public record. Not legal advice.